Headlining the deal will be an additional US$100m in licences for Novell's SUSE Linux Enterprise Server (SLES).
The investment extends Microsoft's original purchase of some 70,000 licences for roughly $240m in 2006.
The deal also granted patent indemnity to all SLES users and served as a signal to many in the industry that Microsoft was finally admitting Linux into its enterprise world.
Now, say the companies, the goal is to make it easier for businesses to run Linux and Windows side by side.
"Some customers have told us they want to be able to run Windows Server and Linux together seamlessly, but in many cases, they need help with the transition to SUSE Linux Enterprise Server from other Linux environments," said Microsoft chief operating officer Kevin Turner.
"Our increased investment in the relationship with Novell is intended to give these customers and partners the best possible Windows-Linux interoperability solution, while also extending their existing Windows Server investments and helping to give them intellectual property peace of mind."